By Niyi Jacobs
In a groundbreaking move to stimulate economic growth and development in Nigeria, the International Finance Corporation (IFC), a member of the World Bank Group, has partnered with the Central Bank of Nigeria (CBN) to increase local currency financing for private businesses in the country.
This pioneering initiative aims to address the long-standing challenge of limited access to local currency financing, which has hindered the growth of small and medium-sized enterprises (SMEs) and other private businesses in Nigeria. By managing currency risks and increasing investment in Nigerian naira, the partnership will enable businesses to thrive and expand their operations, creating jobs and driving economic growth.
The partnership is expected to have a significant impact on the Nigerian economy, with the IFC aiming to provide over $1 billion in local currency financing to private businesses in the coming years. This will focus on key sectors such as agriculture, housing, infrastructure, energy, small and medium enterprises, and the creative and youth economy.
According to Governor Yemi Cardoso of the Central Bank of Nigeria, “This landmark initiative between the IFC and CBN will unlock much-needed long-term local currency financing for private businesses in Nigeria at economically viable rates. This collaboration marks significant progress in the CBN’s commitment to delivering innovative development initiatives through reputable third-party service providers, moving beyond traditional intervention programs. It will serve as a catalyst for economic growth and advance the Federal Government’s agenda for economic diversification.”
Makhtar Diop, IFC Managing Director, added, “Expanding access to affordable local currency financing for small businesses in Nigeria is essential for IFC to address the increasing demand for diverse funding options and to better manage currency risk. Our partnership with the Central Bank of Nigeria will enhance lending in Nigerian naira, fostering economic growth and creating jobs across the country.”
This partnership is a testament to the IFC’s commitment to supporting Nigeria’s economic growth and development. With an active portfolio of investments in Nigeria of up to $2.13 billion, the second highest in Africa, local currency financing is a key priority for the organization. The IFC will continue to leverage innovative financial instruments and strengthen partnerships to meet the growing demand for local currency financing in emerging markets.
